ATRenew (NYSE:RERE) Posts Earnings Results, Beats Estimates By $0.01 EPS

ATRenew (NYSE:RERE) issued its earnings results on Thursday. The company reported $0.10 earnings per share for the quarter, topping the consensus estimate of $0.09 by $0.01, FiscalAI reports. The company had revenue of $972.82 million for the quarter, compared to analyst estimates of $930.34 million. ATRenew had a net margin of 1.90% and a return on equity of 11.48%.

Here are the key takeaways from ATRenew’s conference call:

• Q2 revenue and profitability reached record highs: revenue rose 32.4% year over year to CNY 6.61 billion, while non-GAAP operating profit increased 70.1% to CNY 210 million and margin expanded 69 basis points to 3.1%.
• The higher-margin 1P business continued to drive growth, with product revenue up 35.9%, 1P refurbished-product revenue up 87.8%, and 1P2C retail reaching 48.8% of product revenue versus 34.4% a year earlier. Management said improved retail mix lifted 1P gross margin to 15.7% from 13.2%.
• Net service revenue declined 4.2% year over year to CNY 410 million, mainly because of merchant subsidies, waived or reduced fees during the 618 promotion, and pressure on B2C platform merchant activity. Management expects Paipai’s shift toward 1P retail and 3P consignment to cause some short-term revenue adjustment.
• Recycling demand benefited from trade-in programs and the 618 shopping festival: mobile phone and consumer-electronics recycling value rose 57% during the promotional period, while orders increased 45%. The company also highlighted a 77.3% increase in luxury recycling service revenue and plans to expand themed stores.
• ATRenew launched the overseas B2B marketplace FoneSquare and consumer brand ReRe, targeting expansion from Hong Kong into Dubai and Southeast Asia, but said the initiatives remain in early development. Q3 revenue guidance is CNY 6.34 billion–CNY 6.44 billion, up 23.1%–25.1% year over year, while management did not provide specific full-year guidance.

ATRenew Trading Down 10.9%

Shares of ATRenew stock opened at $4.09 on Friday. The company has a fifty day moving average price of $4.09 and a 200 day moving average price of $4.69. ATRenew has a twelve month low of $3.50 and a twelve month high of $6.47. The stock has a market cap of $897.35 million, a price-to-earnings ratio of 16.36 and a beta of 0.31.

Analysts Set New Price Targets

A number of brokerages have recently commented on RERE. CICC Research began coverage on shares of ATRenew in a research report on Thursday. They issued an “outperform” rating for the company. Wall Street Zen downgraded shares of ATRenew from a “strong-buy” rating to a “buy” rating in a research note on Saturday, July 25th. UBS Group initiated coverage on shares of ATRenew in a report on Tuesday, July 21st. They issued a “buy” rating and a $5.50 price target on the stock. Finally, Weiss Ratings reissued a “hold (c)” rating on shares of ATRenew in a research note on Wednesday, July 29th. Two analysts have rated the stock with a Buy rating and one has given a Hold rating to the company’s stock. According to data from MarketBeat.com, ATRenew currently has an average rating of “Moderate Buy” and a consensus target price of $5.50.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the stock. Wells Fargo & Company MN purchased a new stake in shares of ATRenew in the fourth quarter worth about $30,000. Caitong International Asset Management Co. Ltd lifted its position in ATRenew by 10,014.1% during the 4th quarter. Caitong International Asset Management Co. Ltd now owns 6,473 shares of the company’s stock worth $34,000 after acquiring an additional 6,409 shares in the last quarter. Brevan Howard Capital Management LP purchased a new position in ATRenew in the 3rd quarter worth approximately $49,000. Hsbc Holdings PLC purchased a new position in ATRenew in the 4th quarter worth approximately $67,000. Finally, Van ECK Associates Corp acquired a new stake in ATRenew in the third quarter valued at approximately $83,000. Institutional investors and hedge funds own 19.29% of the company’s stock.

ATRenew Company Profile

ATRenew Inc, through its subsidiaries, operates pre-owned consumer electronics transactions and services platform in the People's Republic of China. It primarily sells mobile phones, laptops, tablets, drones, digital cameras; and vintage bags, watches, liquor, gold, and various household goods through its online platforms and offline stores, as well as provides services to third-party merchants to sell the products through its platforms. The company was formerly known as AiHuiShou International Co Ltd.